Trading Plan for 1/12

Another failed sell-off?… Wednesday wasn’t just another morning dip under relevant support that held through a relevant timing window. There were two or three failed probes that morning. A new trend, or more of the same?

Pattern points… (Setups and technicals)[pay]
In fact, each failed probe was rewarded by returning back into Tuesday’s range. But buyers never exploited the opportunities. Even a last half-hour probe to new session highs was retraced back into Wednesday’s range.

The worst case scenario is not being on the wrong side of a trade. At least that will eventually suggest switching sides. The worst case scenario is a market that doesn’t trend.

I don’t think that will be the case here. Last week already ranged sideways. This week’s sideways ranging should be uncomfortable and try to break one way or the other.

Wednesday’s ranging offered further potential for that break to be lower. At least, initially. Whether as a temporary dip that recovers to resume the rally, or as the beginning of a larger decline, a test of 1277.00-1278.00 remains likely so long as Thursday’s open doesn’t surge to fresh highs.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Keep an eye on the reaction to pre-open news items. If this market wants to trend, then it should be underway already before the open.[/pay]

Look for at least one update overnight or ahead of the Morning Market Tour… My thoughts on the day’s econ calendar are linked here.